The Workweek: A Round-Up of Labor Market Links for the Week Ending 2/3/17

Welcome back to The Workweek, the Indeed Hiring Lab’s round-up of the latest research, news, and perspectives that made us think deeply or differently about the labor market this week. It’s your guide to the most important new insights about work.

Here are our picks for this week:

‘The toolbox is now a computer’

The decline of American manufacturing is a longstanding concern for many, yet anxiety over its impact received new life during the 2016 election. This piece highlights how much new technology is to blame for manufacturing’s ills in light of recent research determining that about 90% of production jobs lost since 2000 fell victim to automation, not workers in other countries. For the manufacturing jobs that remain, employers often have difficulty finding qualified workers, due to a combination of factory work becoming much more technically complex and an educational system that fails to prepare students with relevant hands-on experience. (New York Times)

What’s so good about free trade anyway?

Over the past year, debates on the subject of international trade have raged in the media and, given the current political climate in the US, we can expect these disputes to remain in the headlines for quite some time. However, the idea that free trade is almost always beneficial to all parties involved has long been one of the few on which economists could agree. Tim Harford provides a straightforward and remarkably clear overview not only of the benefits of free trade, but also how business between nations can go bad. (Financial Times)

Disruption need not always mean destruction

When rideshare-apps such as Uber and Lyft started rolling out in US cities, many thought that this spelled the end for the traditional taxi driver. However, recent research from the University of Oxford provides evidence that this technology has not destroyed traditional professional driver services so much as they have created a new market altogether. An analysis of Bureau of Labor Statistics data showed that while self-employed driver employment climbed steeply as was expected, traditional taxi driver employment actually increased as well. Ride-sharing apps haven’t been all good news though, as taxi driver earnings have deflated a bit as a result of increased competition. (MIT Technology Review)

Janet Yellen’s dashboard

After closing out 2016 with its second rate increase in a decade, the Federal Reserve this week decided to hold rates steady. In the opening paragraph of their statement the Fed cited inflation remaining below their 2% target as part of the reason for holding the line. Have you ever wondered what goes into these Fed decisions on interest rates, and would you prefer the answer to be in chart form? If so, this Bloomberg post full of graphical insight into just how the indicators that Janet Yellen follows most closely have fared since the Great Recession is the one for you. (Bloomberg)

Licensed to death

The rise of occupational licensing is an issue of some concern for the labor market, but one which for the most part flies under the radar. In the 1950s, about 5% of workers needed a license to do their job — a number that has climbed to approximately 25% today. The major downside to excessive licensing is higher costs of employment, borne primarily by the worker, which lead to less employment and increased costs to consumers (by one estimate about 2.8 million fewer jobs and annual costs to consumers of $203 billion). Ryan Nunn of the Brookings Institute highlights the detrimental impacts of occupational licensing and the outlook for reform. (RegBlog)